Questions
Unearned Fees appear on the

Unearned Fees appear on the

  • a. balance sheet in the current assets section
  • b. balance sheet as a current liability
  • c. income statement as revenue
  • d. balance sheet in the stockholders' equity section

 

In: Accounting

Prepaid insurance is reported on the balance sheet as a

Prepaid insurance is reported on the balance sheet as a
  • fixed asset
  • current asset
  • long-term liability
  • current liability

 

In: Accounting

Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter.

Garden Sales, Inc., sells garden supplies. Management is planning its cash needs for the second quarter.

The company usually has to borrow money during this quarter to support peak sales of lawn care equip­ment, which occur during May. The following information has been assembled to assist in preparing a cash budget for the quarter:

a. Budgeted monthly absorption costing income statements for April-July are:

 

April

May

June

July

Sales ...

$600,000

$900,000

$500,000

$400,000

Cost of goods sold ...

420,000

630,000

350,000

280,000

Gross margin ...

180,000

270,000

150,000

120,000

Selling and administrative expenses:

Selling expense ...

79,000

120,000

62,000

51,000

Administrative expense* ...

45,000

52,000

41,000

38,000

Total selling and administrative

 

 

 

 

expenses ...

124,000

172,000

103,000

89,000

Net operating income ...

$56,000

$98,000

$47,000

$31,000

*Includes $20,000 of depreciation each month.

b. Sales are 20% for cash and 80% on account.

c. Sales on account are collected over a three-month period with 10% collected in the month of sale; 70% collected in the first month following the month of sale; and the remaining 20% collected in the second month following the month of sale. February's sales totaled $200,000, and March's sales totaled $300,000.

d. Inventory purchases are paid for within 15 days. Therefore, 50% of a month's inventory purchases are paid for in the month of purchase. The remaining 50% is paid in the following month. Accounts payable at March 31 for inventory purchases during March total $126,000.

e. Each month's ending inventory must equal 20% of the cost of the merchandise to be sold in the following month. The merchandise inventory at March 31 is $84,000.

f.  Dividends of $49,000 will be declared and paid in April.

g. Land costing $16,000 will be purchased for cash in May.

h. The cash balance at March 31 is $52,000; the company must maintain a cash balance of at least $40,000 at the end of each month.

i. The company has an agreement with a local bank that allows the company to borrow in increments of $1,000 at the beginning of each month, up to a total loan balance of $200,000. The interest rate on these loans is 1% per month and for simplicity we will assume that interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated interest at the end of the quarter.

Required:

1. Prepare a schedule of expected cash collections for April, May, and June, and for the quarter in total.

2. Prepare the following for merchandise inventory:

a. A merchandise purchases budget for April, May, and June.

b. A schedule of expected cash disbursements for merchandise purchases for April, May, and June, and for the quarter in total.

3. Prepare a cash budget for April, May, and June as well as in total for the quarter.

In: Accounting

Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year

Beech Corporation is a merchandising company that is preparing a master budget for the third quarter of the calendar year. The company’s balance sheet as of June 30th is shown below:

Beech Corporation
Balance Sheet
June 30
Assets  
  Cash $   90,000
  Accounts receivable 136,000
  Inventory 62,000
  Plant and equipment, net of depreciation 210,000
   
  Total assets $ 498,000
   
Liabilities and Stockholders’ Equity  
  Accounts payable $   71,100
  Common stock 327,000
  Retained earnings 99,900
   
  Total liabilities and stockholders’ equity $ 498,000

Beech’s managers have made the following additional assumptions and estimates:

1. Estimated sales for July, August, September, and October will be $210,000, $230,000, $220,000, and $240,000, respectively.

 

2. All sales are on credit and all credit sales are collected. Each month’s credit sales are collected 35% in the month of sale and 65% in the month following the sale. All of the accounts receivable at June 30 will be collected in July.

 

3. Each month’s ending inventory must equal 30% of the cost of next month’s sales. The cost of goods sold is 60% of sales. The company pays for 40% of its merchandise purchases in the month of the purchase and the remaining 60% in the month following the purchase. All of the accounts payable at June 30 will be paid in July.

 

4. Monthly selling and administrative expenses are always $60,000. Each month $5,000 of this total amount is depreciation expense and the remaining $55,000 relates to expenses that are paid in the month they are incurred.

 

5. The company does not plan to borrow money or pay or declare dividends during the quarter ended September 30. The company does not plan to issue any common stock or repurchase its own stock during the quarter ended September 30.

(1) CASH COLLECTIONS SCHEDULE
  July August Sept quarter
From acc Receivable        
From July sales        
From august sales        
from Sept sales        
         
Total Monthly Cash Collection        
         
(2) MERCHANDIZE PURCHASE SCHEDULE
  July August Sept quarter
Budgeted COGS        
Desired ending Inv        
Total needs        
Beginning Inventory (Less)        
Required Purchases        
         
         
         
(2-b) MERCHANDIZE PAYMENT SCHEDULE
  July August Sept quarter
From account payable        
From July purchases        
From August purchases        
From Sept purchases        
Total cash disbursment        
         
         
(3) INCOME STATEMENT
  July August Sept TOTAL
Estimated Sales        
Less: COGS        
Gross Profit        
Less        
         
Net Profit        

4) Prepare Balance sheet as of Sept 30:

In: Accounting

Calculate the unit product cost under absorption costing using the following information.

Calculate the unit product cost under absorption costing using the following information.

Direct materials: $50/unit

Direct labor: $75/Unit

Variable manufacturing overhead:$27/Unit

Fixed manufacturing overhead: $30,000

Units produced: 10,000

Units sold: 6,000

In: Accounting

P Company pays for purchases of materials in full in the month following the purchase

P Company pays for purchases of materials in full in the month following the purchase. During the previous month, IP had purchases of $25,000. During the current month, IP had purchases of $30,000.

The amount that IP will pay during the current month for purchases is ______

In: Accounting

Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below.

Rogen Corporation manufactures a single product. The standard cost per unit of product is shown below.

Direct materials—1 pound plastic at $7 per pound   $ 7
Direct labor—1.6 hours at $12 per hour   19.2
Variable manufacturing overhead   12
Fixed manufacturing overhead   4
Total standard cost per unit   $42.2


The predetermined manufacturing overhead rate is $10 per direct labor hour ($16 ÷ 1.6). It was computed from a master manufacturing overhead budget based on normal production of 8,000 direct labor hours (5,000 units) for the month. The master budget showed total variable costs of $60,000 ($7.5 per hour) and total fixed overhead costs of $20,000 ($2.5 per hour). Actual costs for October in producing 4,800 units were as follows.

Direct materials (5,100 pounds)   $ 36,720
Direct labor (7,400 hours)   92,500
Variable overhead   59,700
Fixed overhead   21,000
    Total manufacturing costs   $209,920


The purchasing department buys the quantities of raw materials that are expected to be used in production each month. Raw materials inventories, therefore, can be ignored.

(a)

Compute all of the materials and labor variances. (Round answers to 0 decimal places, e.g. 125.)

Total materials variance   $Rogen Corporation manufactures a single product. T   Rogen Corporation manufactures a single product. T UnfavorableFavorableNeither favorable nor unfavorable
Materials price variance   $Rogen Corporation manufactures a single product. T   Rogen Corporation manufactures a single product. T Neither favorable nor unfavorableUnfavorableFavorable
Materials quantity variance   $Rogen Corporation manufactures a single product. T   Rogen Corporation manufactures a single product. T UnfavorableFavorableNeither favorable nor unfavorable
Total labor variance   $Rogen Corporation manufactures a single product. T   Rogen Corporation manufactures a single product. T FavorableNeither favorable nor unfavorable unfavorable
Labor price variance   $Rogen Corporation manufactures a single product. T   Rogen Corporation manufactures a single product. T UnfavorableFavorableNeither favorable nor unfavorable
Labor quantity variance   $Rogen Corporation manufactures a single product. T   Rogen Corporation manufactures a single product. T Neither favorable nor unfavorableFavorableUnfavorable

In: Accounting

Schedule of cost of goods manufactured

Schedule of Cost of Goods Manufactured

The company reported the following information for the year:

Prepare a schedule of cost of goods manufactured for the year.

In: Accounting

Which item is included in the NIMS Management Characteristic of Accountability?

Which item is included in the NIMS Management Characteristic of Accountability? 

A. Check-in/Check-Out of incident personnel

B. Maintain an accurate inventory of resources

C. Establish specific, measurable objectives

D. Conduct briefings as part of transfer of command

In: Accounting

Statement of cash flows indirect method

Preparing the statement of cash flows—indirect method

Use the Rouse Exercise Equipment data in Exercise E16-23. Prepare the company’s statement of cash flows—indirect method—for the year ended December 31, 2018. Assume investments are purchased with cash.

In: Accounting